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Billing
Invisibility:
Account Control and the Telecom Consumer
1999-2004
a market research report
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Despite the fact that the consumer bill is a priceless piece of telecom real estate, many carriers fail to utilize it as an effective marketing medium. Billing and customer service are still considered expense items on a carrier’s balance sheet, yet they remain the only real customer interaction in an otherwise commodity market.
When Insight asked over 1,000 respondents who carried their long distance calls, 74 percent said it was one of the Big Three companies––AT&T, MCI WorldCom, or Sprint. Yet the overwhelming dominance of the Big Three companies is offset by the fact that ten percent of the population is up for grabs—we believe—because of confusion created by poor billing practices. Five percent of those surveyed said they did not know who their long distance carrier was, and another five percent incorrectly identified their local Bell operating company, whose name and logo appear on the envelope and the initial bill pages. Owning the bill implies owning the customer.
Telco billing savvy lags behind other sectors like the credit card industry, which corrects billing mistakes swiftly, provides year-end billing summaries, and uses the bill to promote customer loyalty. When the telephone industry finally introduced a billing innovation, problems ensued. Third-party billing, intended as a convenience, leaves the door open to unauthorized charges or "cramming," a practice that tarnishes a phone company's image.
While the problems related to phone billing are nothing new, measuring the impact of billing on consumer switching patterns is.
Billing Invisibility: Account Control and the Telecom Consumer utilizes a primary demographic survey to quantify customer response to telephone bills, number of billing problems, timeliness of resolutions, cramming experiences, and propensity to switch carriers. The report analyzes telephone companies’ current approach to billing, comparing the format and content of six actual LEC phone bills. Insight offers strategies for turning the bill into a valuable weapon against the competition and strengthening consumer loyalty. Trends explored include government intervention to clarify bills, bundling and consolidation, and distributing bills via the Internet.
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Report Excerpt
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Billing Background
Despite the fact that the customer bill is a priceless
piece of telecom real estate, many carriers fail to
utilize it as an effective marketing medium. Billing and
customer service are still considered expense items on a
carrier’s balance sheet, yet they remain the most
obvious customer-facing elements of a network operation.
Insight’s research suggests that the bill should be
treated as something more than a vehicle to distribute
information to the consumer. If it is done well, the bill
will enhance customer loyalty and satisfaction, increase
customer use of services thereby increasing revenue.
This report reviews trends in the bill rendering and
presentation. We examine telephone bill problems and
resolutions from the customers’ point of view, and
we cover recent government intervention in this arena.
When Insight asked approximately 1,000 respondents who
their long distance carrier was, 74 percent said it was
one of the Big Three companies, AT&T, MCI WorldCom,
or Sprint. (Insight saw no change in this statistic from
its 1998 consumer telecom study of approximately 1,000
respondents.) Yet the overwhelming dominance of the Big
Three companies is offset by the fact that fully ten
percent of the population is up for grabs--we
believe--because of poor billing practices.
Fifteen years after divestiture, despite billions of
dollars thrown at mass adverting campaigns and millions
of family dinner hours interrupted by telemarketing
calls, almost five percent of the respondents said they
did not know who their long distance carrier was. Another
five percent were confused and thought their local Bell
operating company was providing their long distance
service.
Insight believes the confusion stems from the bill. The
outside envelope and the beginning pages of the regional
Bell operating company’s (RBOC’s) bill carry
the local phone company logo and name which results in
strong brand identification for the local company. The
long distance company charges and company name are buried
in the middle of the local phone company bill, making
brand identification for the long distance company almost
nonexistent. Owning the customer implies owning the bill.
Report Objectives
The objective of this report is to shed light on the
status of telecommunications billing in the consumer
market. The report utilizes primary research commissioned
by Insight Research Corporation to review and analyze
current customer response to telephone bills and
problems. The report analyzes the telephone
companies’ current approach to billing and whether
or not billing is being used as an opportunity within the
consumer marketplace. It also takes an in-depth look at
the top telephone carriers’ phone bills and their
abilities to use the bill as a weapon against their
competitors. Telephone bill format and content are
analyzed and compared. In a recent interview in Billing
World Magazine, one RBOC’s billing executive
admitted, “my own wife told me, you’re in
charge of billing and the phone bill is the dumbest bill
I get.” This report includes suggestions for
improvements to turn the bill into a valuable weapon
against the competition. Other trends we explore include:
- Government intervention to clarify bills,
- Bundling and consolidation, and
- Distributing bills via the Internet instead of through
the mail.
Key Points
Insight Research makes the following key points in this
report:
- RBOCs continue to do the majority of long distance
billing for the long distance carriers, and therefore are
getting the strong brand identification and brand
recognition which will serve them well when they are
permitted to enter the long distance market.
- Primary research reveals the billing problem statistics
are very high. Four problem categories accounting for
over 80 percent of the total. Clearly, the industry needs
to improve these statistics.
- Research also reveals that billing problem resolution
statistics are under par. Customers say it is taking too
long to resolve problems or that too many problems are
left unresolved.
- The billing industry is mature. Billing vendors
currently offer a variety of billing solutions that may
provide speed-to-market as well as higher compatibility
instead of telcos building such functionalities in-house.
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Table of Contents
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Chapter I
EXECUTIVE SUMMARY
1.1 Billing Background
1.2 Report Objectives
1.3 Key Points
Chapter II
SURVEY RESULTS
2.1 Objectives and Scope
2.2 Findings and Analysis
2.2.1 Impact of Competition on the Long Distance Market
2.2.2 Switching Behavior and Reasons
2.2.2.1 Number of Times Long Distance Carrier Was Changed
2.2.2.2 Respondents Most Likely To Switch Carriers
2.2.3 Long Distance Billing Problems and Problem
Resolution
2.2.3.1 Customers Most Likely to Have Billing Problems
2.2.3.2 Types of Billing Problems
2.2.3.3 Billing Problem Resolution
2.2.4 Wireless Billing Problems and Problem Resolution
2.2.4.1 Wireless Customers Most Likely to Have Billing
Problems
2.2.4.2 Wireless Billing Problem Resolution
2.2.5 Internet Usage Problems and Problem Resolution
2.2.5.1 Desciption of Internet Users
2.2.5.2 Internet Users Most Likely to Have Billing
Problems
2.2.5.3 Internet Service Billing Problem Resolution
2.3 Summary
Chapter III
MARKET ANALYSIS AND REGULATIONS
3.1 Build, Buy, or Outsource
3.1.1 From Service Support to Revenue Source
3.2 Billing Includes Many Activities
3.3 Financial Condition
3.3.1 Research and Development Expenditures
3.4 Truth in Billing
3.4.1 Industry’s Own Guidelines
3.4.2 Do’s and Don’ts
3.5 New Fees
Chapter IV
TAKING A CLOSER LOOK AT THE BILLS
4.1 Billing as a Weapon
4.2 Third-Party Billing
4.3 Analyzing the Bills
4.3.1 Brand Image, Clarity, Flexibility, and
Effectiveness
4.4 Display of Carrier Bills
4.4.1 Bell Atlantic
4.4.2 BellSouth
4.4.3 SNET
4.4.4 Southwestern Bell (SBC)
4.4.5 U S WEST
4.4.6 Ameritech Leads the Way
4.4.6.1 Before and After Bill Redesign
4.5 Review of Bell Operating Companies and SNET Bills
Chapter V
FUTURE TRENDS AND RECOMMENDATIONS
5.1 Billing Visibility
5.1.1 More Sophisticated Marketing Tools
5.1.2 Bundling/Consolidation
5.1.3 Government Intervention
5.1.4 Billing and Customer Care on the Internet
5.2 Future Growth
5.3 Conclusion
Table of Figures
Chapter I
I-1 Respondents with Billing Problems; Number of Problems
Reported, 1999
Chapter II
II-1 Customer Identification of Their Long Distance
Carrier, 1999
II-2 Number of Moves by Consumers that Switched Long
Distance Carriers in Past Two Years, 1999
II-3 Respondents Who Would Not Switch Long Distance
Carriers, 1999
II-4 Main Reasons Consumers Switched or Would Consider
Switching Long Distance Telephone Companies, 1999
II-5 Respondents Reporting at Least One Problem with
Their Telephone Bill in Past 12 Months, 1999
II-6 Respondents Reporting at Least One Problem with
Their Telephone Bill in Past 12 Months, by Age of
Respondent, 1999
II-7 Respondents Reporting at Least One Problem with
Their Telephone Bill in Past 12 Months, by Geographic
Region, 1999 II-8 Respondents with Billing Problems;
Number of Problems Reported, 1999
II-9 Most Frequent Problems in Last 12 Months, 1999
II-10 Time to Resolve Long Distance Phone Bill Problems,
1999
II-11 Wireless Respondents Reporting at Least One Problem
with Their Wireless Telephone Bill in Past 12 Months,
1999
II-12 Wireless Respondents Reporting at Least One Problem
with Their Wireless Telephone Bill in Past 12 Months, by
Geographic Region, 1999
II-13 Time to Resolve Wireless Phone Bill Problem, 1999
II-14 Respondents Connected to the Internet by Income
Level, 1999 ($Thousands)
II-15 Respondents Who had Problems with the Internet
Service that Required Making a Phone Call, 1999
II-16 Time to Resolve Internet Problems, 1999
II-17 Problem Resolution Options, 1999
II-18 Time to Resolve Problems, by Type of Service, 1999
Chapter III
III-1 Page From Siegel & Gale’s Do’s and
Don’ts Brochure
III-2 Sprint’s Mailing to New Jersey Customers for
Presubscribed Line Charge Rate Increase
Chapter IV
IV-1 Chase Visa 1998 Year-End Summary
IV-2 How to Read Your New Bank Statement (Sovereign Bank)
IV-3 Bell Atlantic Bill, Page One
IV-4 Bell Atlantic Bill, Page Two
IV-5 BellSouth Bill, Page One
IV-6 BellSouth Bill, Page Two
IV-7 SNET Bill, Page One
IV-8 SNET Bill, Page Three
IV-9 Southwestern Bell Bill, Page One
IV-10 Southwestern Bell Bill, Page Two
IV-11 U S WEST Bill, Page One
IV-12 U S WEST Bill, Page Two
IV-13 Instructions on How to Read the New Ameritech Bill
IV-14 Ameritech’s Original Bill, Page One
IV-15 Ameritech’s Original Bill, Page Two
IV-16 Ameritech’s Revised Bill, Page One
IV-17 Ameritech’s New Payment Stub Attached to Page
One
Table of Tables
Chapter III
III-1 Billing Systems Of Some of the Top Wireless
Carriers
III-2 Earnings per Share of Publicly Held Companies in
the 1998 Jefferies Billing Index
III-3 Research and Development Spending for Billing
Companies ($Millions)
III-4 Universal Service Fund Charge
III-5 Cost of Keeping Customer’s Own Phone Number
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Pricing Information
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Hard Copy Price
$ 799
Electronic Copy Price
(PDF
License Descriptions)
$ 939 Single-User Printable PDF
$ 1399 6-Seat Printable PDF
$ 2000 Unlimited Corporate-Wide Distribution
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Telecom
Market
Research,
